Week in Perspective: The World Is Embracing Virtual Spending - Which Payment App Is Right For You?

Lately, I’ve had numerous people ask me about digital payment apps. Specifically, how safe I think they are. Personally, I use Venmo. It was the first digital payment app that I fell into and I have been loyal to it ever since. As for safety, this day and age, your iPhone has your facial scan, probably remembers most of your passwords for you, and before the facial recognition collected millions of peoples fingerprints around the world. I’m saying this because when it comes to safety, it’s alot relative. If someone wants to get into your stuff, chances are there is a way. However, Venmo has done a great job for me for years and I haven’t had any problems. Seeing that we are only going further into the digital age (cue the insane growth and adoption of cryptocurrency), it’s probably safe to say that digital isn’t going anywhere but up. 

Paying online has become easier and more accessible over the years. Then, COVID-19 pandemic took virtual spending to an entirely new level. As more and more people are embracing this type of spending, the payment options are growing.

With that in mind, which virtual payment option may be right for you? Here I’ve listed seven of the top apps (arranged in no particular order) available to most consumers right now. 

Option #1: PayPal

PayPal has been around since 1998 and acquired by eBay in 2002, making it the provider for eBay transactions.¹ Users are typically not charged a fee when sending money to friends or family members, but you will be charged a fee if you send money from a credit card or convert any currency. Users have the ability to transfer money to any U.S.-based bank account plus several foreign ones. 

Paypal Fees and Transaction Limits

There is no fee to open an account, but there may be a 2.9 percent processing fee per qualifying transaction. Users can send up to $60,000 through PayPal, however, they may be limited to sending $10,000 per single transaction.²

Option #2: Venmo

Venmo is owned by PayPal, however, there are some key differences between the two apps. 

It is designed specifically for sending money between friends and family. Unlike Paypal, there is a social aspect to Venmo, as users are encouraged to include messages and emojis in transactions that can be seen by other users in your network.

Venmo uses encryption protocols in order to protect the personal and financial information of the users with information stored on servers that are in secure locations. Additionally, you can set up a PIN code and multi-factor authentication for greater security. 

While Venmo is primarily used on your mobile phone, the above security measures are put in place to allow users to receive and transfer money effortlessly and safely.  

Venmo Fees and Transaction Limits

There is no cost to send money using your bank account, and users can pay for business transactions using this app. There is a three percent processing fee for qualifying transactions with a $299.99 spending limit for unverified users and less than $4,999.99 a week for verified users.² 

Option #3: Zelle

Zelle is a mobile app with a simple interface. As a user, you can send same-day money transfers to anyone who has an account with a participating bank including:

• Chase
• Bank of America
• Citi
• Wells Fargo
• Ally
• Capital One

Zelle has an app available for download on your phone, however, you can send money without the app, as well. Use your primary account when using Zelle, as you can only connect one account at a time using this app. 

Zelle Fees and Transaction Limits

Zelle is free for the user, however, banks are charged between $0.50 and $0.75 for each transaction. As far as transactions go, if your bank doesn’t offer Zelle, then you can only spend $500 per week.³ If it does, you can spend up to $1,000 in 24-hours, $2,500 in a week or $10,000 in a month.⁴ 

Option #4: Apple Cash

If you have an iPhone, you can easily send or receive funds through Apple Cash. To use this app you can: 

1. Open the messaging app
2. Select or create a new contact
3. Tap the Apple pay icon at the bottom of your screen

Apple Cash Fees and Transaction Limits

There is a one percent fee deducted from each transfer, and you can send or receive a minimum of one dollar with a maximum of $10,000 in a seven-day period.⁵ 

Option #5: Cash App

Cash App, formerly known as Square, is now the number one finance app in the App store.⁶ Upon signing up, you are given a screen name called a $Cashtag. You can easily find others using their phone number or email address. Using a linked bank account, Cash App allows you to send and request money virtually. 

Cash App Fees and Transaction Limits

Cash App is free to set up, but if you pay with a credit card, each transaction will incur a three percent transaction fee.⁶ It generally takes one to three business days to transfer funds to your bank account. If you prefer to receive your money instantly, expect a 1.5 percent transaction fee. You can send up to $250 within a 7-day period and $1,000 within a 30-day period.⁷ 

Option #6: Google Pay

Formerly known as Google Wallet, Google Pay integrates with the G Suite account you may already have. It’s designed to work well with other Google products and services, making it easy and intuitive to use for those who are already accustomed to Google’s offerings.

Google Pay Fees and Transaction Limits

There are currently no fees to sign up to use Google Pay. Users are limited to sending up to $10,000 in a single transaction.⁸ 

Option #7: Facebook Pay

Facebook is home to around 2.7 billion users.⁹ Through Facebook Messenger, users can send money to anyone with an account - as long as their debit card has been connected. Once payment has been accepted, it will appear in your bank account within five business days.  

Facebook Messenger Fees and Transaction Limits

Facebook Pay has no fees and does not store money in an online account. There is no minimum amount that you can send or receive and the maximum amount is $9,999.

From online shopping to splitting the bill at dinner, payment apps provide convenience and security when it comes to spending your money. With plenty of options to choose from, these tools can help streamline your payment methods for future transactions.

Last Monday to Wednesday was a tease for market participants in that the S&P 500 narrowly missed out on an all-time closing high in every session. It finally got over the hump on Thursday and ended the week with a 0.4% gain. Price action was relatively tight ranged throughout the week for the benchmark index.

The Nasdaq Composite (+1.9%) and Russell 2000 (+2.2%) each rose about 2%, while the Dow Jones Industrial Average (-0.8%) declined nearly 1.0%.  

From a sector perspective, the S&P 500 real estate (+2.0%), health care (+1.9%), information technology (+1.4%), and consumer discretionary (+1.6%) sectors finished the week as leaders. The latter was propped up by a 4% gain in Amazon.com (AMZN). 

On the other hand, the cyclical financials (-2.4%), materials (-2.0%), and industrials (-1.7%) sectors declined around 2.0%. 

The underperformance of the cyclical stocks was partially due to profit-taking interest and an underlying belief that the economy is running into peak growth rates. The latter viewpoint was indirectly corroborated by the Treasury market, which appeared to be sticking with the peak inflation thesis. 

Specifically, the 10-yr yield fell ten basis points this week to 1.46%, even though total CPI was up 0.6% m/m in May (Briefing.com consensus 0.4%) and up 5.0% yr/yr. Interestingly, even the stock market liked the report as it ran with the peak inflation argument expressed by Treasuries. 

Speculative stocks did well, too, presumably on the understanding that the Fed isn't in a rush to tighten or communicate it will tighten policy. Economics polled by Reuters expected the Fed to officially announce a plan to taper asset purchases in August or September. 

Separately, Biogen's (BIIB) Alzheimer's treatment received FDA approval, sending BIIB shares up 39% for the week. The iShares Nasdaq Biotechnology ETF (BIIB) gained 5.9%